Illicit trade is undermining public health in El Salvador. The small Central American country is dealing with gangs trading illegal cigarettes, that already make up close to 31 percent of the total cigarette market.
According to Jose Alfredo Castro, of the Border Security Division, gangs do not participate directly in introducing and distributing illegal cigarettes. They do however profit from this illicit trade by allowing criminal groups to operate within areas they control. “Their participation occurs on the level of the presence they have in the communities and, obviously, the border communities” where tobacco smuggling “is not the exception, because…they exercise control there: If someone wants to work in that area, they must pay,” Castro says.
Crime Stoppers, the non-governmental organization that cooperates with the police by giving them information collected through their website, says gangs use the money earned through illicit trade to buy weapons, vehicles and real estate. So, illegal cigarettes are directly funding organized crime and destabilizing the economy of El Salvador.
Damaging the economy
Each year El Salvador consumes up to $940 million in cigarettes, according to a CID Gallup study presented by Crime Stoppers in March of this year. 31 percent of those cigarettes are illegal. And the numbers are growing. Legal tobacco companies are already losing more than $291 million due to this illicit trade. Besides this loss the country’s treasury loses another $15 million because of it.
Illicit trade in Central America
El Salvador is the second biggest illegal cigarette market in Central America, after Panama. In this country 67 percent of the cigarettes come from illicit trade. In Guatamala this is 21 percent, Honduras 20 percent, Costa Rica 16 percent and in Nicaragua 5 percent. The danger of illegal cigarettes, besides funding organized crime, is that nobody knows where they are manufactured. They first arrive at ports in Panama and Belize. From there they’re distributed by land until they arrive in El Salvador. It’s believed the gangs also play a major role in coordinating the product through drug trafficking routes they use.